The article noted that taxes on a piece of real estate – home, airpark, etc., nationwide averaged around 1% of the property’s assessed value.

That got me to thinking and I checked my own home tax assessment and talked to several other people both locally and in distant places and discovered this was a good rule of thumb. It is always important to check out the tax load on the place you are considering purchasing, but you can probably use this bit of data for early figuring.

Of course, I will look forward to hearing from those who deal with this type of material all the time telling us whether r not this is a valid rule of thumb.

My response: I don’t know of any lender specializing in airpark properties, but there are firms that can help you. If you’ll share the general area you are looking at perhaps I can help you find a lender. Additionally, by pointing out the region you are looking at some lenders in that area as well as other airpark residents are very likely to come forward with additional information for you. If anyone has suggestions, please post them in the comments section below.

Charlie Masters from Sandy’s Farm Airpark sandysairpark@sportys.com said to contact you.

I live on a modest little airport community 18 mi. north of Tampa FL. called Tampa North Aeropark (X 39). Before this Sub-Prime Mortgage Fiasco hit the fan the market value of my 4 bedroom 3 full-bath country-style hangar home was approximately $440,000. Now I can’t get an appraisal up over $250,000.00. It seems “they” do everything they can to purposely de-value my place. My loan officer told me Bank of America is holding so many foreclosure properties they have de-valued everything in the market so they can unload their inventory.

My biggest hurdle is the COMPS. The Appraisers don’t know how to appraise “Airport Community Homes”, They just don’t see the VALUE of living with your plane on a runway. They want to compare my place with a run-of-the-mill home in the area. More than likely sold real cheap & fast so the seller could get out from under a sub-prime mortgage and/or they lost their employment during this fiasco the Banks caused to the world economy.

My question to you is . . . Do you have knowledge of this happening elsewhere ? If so . . . What is being done to address it ?

Could you direct my path to Real Estate Appraisers that know what they’re doing ? I don’t care if they’re in other states. They might know useful stratigies and have connections that could help me here. This might be an area for your “Living with your Plane” to address at this time.

Answer: Thanks for your letter. I understand your predicament and although it doesn’t help much, there are many others facing similar situations as yours. Unfortunately, during the boom years in the residential home mortgage market some appraisers didn’t do their job properly: they found out what the requested loan was and the resulting appraisal in far too many instances came out high enough to allow the loan. Today, with banks and mortgage firms under a lot of pressure from federal agencies, the appraisers must be much more accurate in their reports.
When you couple the pressure on the appraisers with the slowdown or meltdown in home values, you find appraisals are coming in much lower now than a few years ago. And, as you have discovered, airpark homes are not all that common which makes it difficult for appraisers to come up with legitimate comparable sales. And, most appraisers don’t have the foggiest notion of a residential airpark (just like insurance agents and mortage companies) so that makes the situation doubly perilous.

We have encouraged mortgage lenders and appraisers both to start looking at online sites like Zillow as a source for comps. Zillow maintains an extensive database of home sales and usually you can find sales within a reasonable distance of your property with which to compare square footage, amenities, etc. I encourage appraisers to compare airpark homes with golf course homes as a means of establishing comps. Not an exact science, but neither is the appraisal business.

Click on Resources section of the Living With Your Plane website and you will find a variety of professionals who hopefully can assist you in your efforts.

Please keep us posted on your situation.

Is this a Florida thing or is this another obstacle to living next to your airplane?

Here’s a response from Lenny Ohlsson, Broker and Realtor at Spruce Creek Fly-in who has been working at the airpark almost since its inception:

Spruce Creek has no problem with obtaining mortgages and the hangar does provide value to the property. In fact, property on a taxiway is about double the price of non taxiway property. All the local banks and mortgage companies know the value of the hangar and are more than willing to lend money for hangar homes.

Pat and I have been here for 22 years and this is the first I heard of this.

Lenny Ohlsson
Spruce Creek Fly-In Realty
sales@fly-in.com

What we need some help on is a thru the fence agreement between one of the property owners and the HOA. One of our owners owns several acres adjoining community/HOA owned property and they keep horses there. At the present, they simply access their property “thru the fence” from their property, then across HOA property, then onto their adjoining land. We’ve not had any problems, and really don’t expect to, but I suggested a Thru the Fence agreement should be drawn up to establish the rules, guidelines, restrictions, etc for this resident to access his adjoining property (which is NOT part of the subdivision at all). He is quite agreeable to this and would like to draw up something.

Does anyone have any Through the Fence agreements they might be willing to share, to help us create something?

Thanks,

Chuck Hanna

Chuck,

We’ve posted a 1989 FAA guideline for Thru The Fence agreements that should help as a guideline for establishing an appropriate Thru The Fence agreement for your particular situation. The FAA in some regions has really been creating problems with TTF agreements but if you don’t have any federal funds involved, this shouldn’t be any problem for you. Since your situation is so unique, it appears to me an attorney with knowledge of real estate and general aviation should be able to put something together that would address your situation.

Of course, we’d like to see a sample TTF agreement submitted so we can share it with everyone.

As you’ve indicated, this isn’t a usual TTF agreement.

Keep us posted on what you come up with.

Dave Sclair

Publisher

I am building an airpark in Mississippi, about 12 miles N/W on McComb (KMCB) in Auburn MS. It is 3,000 ft and includes a 300 ft. overrun (grass). Runway 6/24 will be called Lockhaven Airpark LLC. This is the runway area, and there is a 3 1/2 acre section for hangers that will be called Lockhaven Properties LLC. For future development I am putting in a 10-acre lake and will still have about 40 acres for future home sites.

For now it will be a small airpark with just a few people using it (less than 6 people).

My questions are about Liability Insurance and what kind of cost would be average. I would also like to put it on your web site and any other thing I may need to know on thing to do.

Dave responds:

Wow!

Great location, nice runway length, separate residential airpark and hangar areas, plans for a 10-acre lake and still plenty of property for future development.

Sounds like a project that should be very inviting to lots of folks. My only question is whether or not you can make this pencil out with only half a dozen people on the airport, but I’m sure you’ve already given that plenty of consideration and figured out how to make it work.

We’re happy to get your project onto our website where we can list it as “under construction.” We only ask that you keep us posted on the progress of the project so interested people will have the latest information. Please complete the form on the LWYP webpage (http://livingwithyourplane.com/directory/submit-airpark/) and we’ll be able to get you posted.

As for liability insurance and what kind of cost would be an average I have to tell you there is no such thing as an average. Most insurance firms will rate your project  on an individual basis.

I can tell you that most of the airpark groups with which I am familiar acquire a policy in the $1 million range. Check with some of the companies listed under Resources (http://livingwithyourplane.com/professionals/insurance/)  Until you open for business and aircraft are actually landing on the runway, you probably won’t need liability coverage.

Just wanted to let you know that LWYP saved our Homeowners Association almost $1,000 in insurance premiums this year. The past several years we had been paying Air Capital Insurance of Wichita, Kansas, $2900 for a $500,000 liability policy.

After you conducted your insurance survey, and several underwriters contacted you, I contacted Mike Schiller at Wenk Aviation Insurance Agency, Inc., Highland Park, Illinois. Wenk provided a $1,000,000 liability policy for $1,922. Thank you.

Charles Wood
Paradise Air Haven Airpark (39OK)
Washington, OK

Located in Highland Park, IL, Wenk said his company was started by his father and today includes his own offspring, thus making it a 3-generational insurance agency providing a full range of coverage. He claimed his firm, Wenk Aviation Insurance, is the oldest aviation insurance firm in the country. The firm is licensed to sell insurance in every state except Hawaii and Alaska, he added.

Most residential airparks are securing liability coverage of $1 million although he has written policies as high as $10 million. Wenk reported that there is no “average” figure for liability coverage. “Every situation is different,” he explained. “Does the airpark sell fuel, is there a maintenance facility, are the homes fenced from the runway, can kids get to the airplanes, etc., are all questions that the insurance underwriter wants to have answered,” Wenk added. He said the premium for the insurance coverage depends on the answers.

“We’ve written $1 million liability policies for as low as $850 and as high as $21,000,” he stated.

You can reach Went Aviation Insurance at 1-800-225-WENK.

Our airpark, High Mesa Airpark LLC has a 3300 foot long, 60 foot wide runway. Each of the 20 lots of 2 acres owns property out to the middle of the runway, with a setback of 150 feet where no construction is allowed. Each lot owner makes his own taxiway to the runway.

In your answer, “Hopefully the runway, taxiways or other common property are held by a homeowners association that is incorporated.” The question is what is meant by the words, “held by”?

Also, in paragraph two, “consider the value of the property owned by the association.” Our association does not own any of the runway itself.

How could one distinguish between runway ownership and home ownership of for example lot 7, and a common runway?

The situation might also be complicated by our County Planning and Zoning regulations.

In the event of an “incident” leading to litigation, most likely occurring on the runway, the situation becomes even more unclear.

I concur with you in that I would not want to be part of an association that goes without liability insurance. Possible resolution of these questions might come from a study of other examples of past cases involving air park associations in litigations.

Do you know of an attorney with experience involving air park associations? Please advise.

Thank you,

Ron Garver, Maintenance Manager
Phil DiBartola, Air Park Assn. President

Jon R Shimer writes:

The average AGL (Airport General Liability) policy we see starts at $1 million combined single limit, and more can usually be written. Each policy is tailored individually for each Homeowner/Airport/Airpark so I can’t be specific on rates. However there has been some modest decreases in premiums as competition is growing for this class of business.

The Homeowner’s coverages are generally written by a local agent for the home and we would write the “Aviation” side of the exposures as most homeowner policies exclude all things related to “Aviation”.

However, we can usually write the individual hangar with an apartment built inside. Our coverage typically written is for the Premises, Hangar and Contents, and any Aircraft. I don’t write homeowners’ policies but here again rates are different for each location. Florida will be a lot tougher and expensive to write than say a home in Iowa due to hurricane and flood exposures.

We would welcome the opportunity to quote aviation insurance needs of your Living With Your Plane subscribers. Thank you for giving Aviation Insurance Resources (AIR) an opportunity to respond to your questions.

Jon R. Shimer, Jr., Aviation Insurance Resources, POBox 32, Frederick, MD 21705, Phone: 877-247-7769, website: www.AIR-PROS.com and e-mail: JShimer@AIR-PROS.com

Norma Joyce explains:

I can’t answer all of your questions, but I can tell you that Airparks are difficult to find companies that will write Premises Liability for this risk. If you have an Airpark, the underwriter will want to know details regarding the runway, the security at the airpark (for example, is it fenced), the length and width of the runway, and how many residents – homes are there. They also want to know if the roads are taxiways and what activities are conducted at the Airpark. The policies normally will exclude all commercial uses and contests. The actual policy will only cover the runway, taxiways and ramp area, they compare the policy to a regular airport Premises Policy. They do not cover the houses, individual hangars, or roads in between.

Most of the small Airparks buy $1,000,000 Premises. If the Association supplies the residents with gas and oil they should carry Product Liability coverage. The Owner of the Airpark is usually the named insured and the Association is usually an Additional Insured.

The last quote I received on a large Airpark was $10,000,000 Premises for $5,700. The premium for most $1,000,000 Premises policies for would be $1,600 – 2,000.

Norma Joyce, AUA, POBox 35289, Greensboro, NC 27425 Phone: 800-727-3823. Website: www.auaonline.com